The public sector and industry in NSW are being urged to build infrastructure projects faster as the state government investigates how to cut the costs.

“The procurement we’re currently undertaking shows that competition is helping, but is there structurally something that we have to do as well?" NSW Treasurer
Mike Baird
told The Australian Financial Review at the University of Wollongong’s symposium for next-generation infrastructure in Sydney.

“What’s missing more broadly across the public service is the understanding that time is money," Mr Baird said, adding government needed to work with industry to reduce the time taken to build projects.

“There’s a view from industry that there is a capacity to bring down that cost and that is something that we’re keen to pursue."

Mr Baird acknowledged that better long-term planning, such as setting aside corridors for the development of road and rail projects, could help cut costs by reducing the need for tunnelling underneath developed areas.

The government will encourage private-sector participation on WestConnex, which will use about $1.8 billion in state funding and $1.5 billion in federal funding to build the first section and charge tolls to help fund later stages.

“We expect future private-sector investment such as superannuation funds taking out the state government’s equity position," Mr Baird said, adding the proposed model created a brownfield asset that would be attractive for pension funds to invest in.

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David Edwards
, director-general for the Queensland Department of State Development, Infrastructure and Planning, said the state was focusing on projects that were affordable and which could be well-managed.

Queensland, which along with NSW is investigating why its infrastructure costs are so high, historically had an “uncoordinated and piecemeal" approach to projects, and built too many “Taj Mahals" during the resources boom, he said.

“We built for the peak every time and that drove up costs . . . we want a more rigorous and disciplined approach in Queensland." The government is planning on prioritising projects, such as a freight corridor to the Port of Brisbane. Despite the financial collapse of toll roads such as the Clem Jones Tunnel and Airport Link in Brisbane, Queenslanders did not have an inherent aversion to paying tolls, Mr Edwards said.

Instead, traffic figures had been overestimated in planning. “Sometimes when the bankers and financiers get involved, we do see a bit of askew in some of these [traffic] figures," he said.

Former NSW Premier
Nick Greiner
agreed poor performance of public-private partnerships such as Sydney’s Cross City Tunnel, which went into receivership for the second time last month, was driven by “competitive juices" pushing up costs. But he said the model should not be abandoned.

“What was wrong was the way they were structured," he said.

Shirley In’t Veld
, a board member at CSIRO and a non-executive director at ports group
Asciano
and energy utility
Duet Group
, said a combination of factors extended project timetables and costs, including talent shortages, poorly designed equipment and sabotage.